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Asia-pacific

Afghan central bank governor flees to US

Text by News Wires

Latest update : 2011-06-28

Afghanistan central bank governor Adbul Qadir Fitrat (pictured) said Monday that he was forced to resign and flee to the US amid fears of reprisal for his role in investigating corruption at Kabul Bank, the country's biggest private lender.

AFP - Afghanistan's central bank governor has reportedly resigned and fled to the United States, arguing his life is in danger over a corruption probe targeting well-connected figures.
             
Abdul Qadir Fitrat, chairman of Da Afghanistan Bank, made his announcement while on a visit to the United States, where he has permanent residency, according to several news reports.
             

KABUL BANK SCANDAL

He said he feared political interference and reprisals over his investigation into the near-collapse last year of Kabul Bank, the war-torn country's largest private lender.
             
"My life was completely in danger and this was particularly true after I spoke to the parliament and exposed some people who are responsible for the crisis of Kabul Bank," he was quoted as saying by the BBC.
             
In April, Fitrat named in parliament high-profile figures who were allegedly involved in a mammoth corruption scandal at Kabul Bank.
             
The bank was founded in 2004 by Sherkhan Farnood, a leading international poker player. Its co-owners included Mahmood Karzai, a brother of President Hamid Karzai, and a brother of Vice President Mohammad Qasim Fahim.
             
The lender was taken over last year by Afghanistan's central bank after claims that executives had granted themselves off-the-book loans worth a reported $900 million that were partly used to buy luxury properties in Dubai.
             
The scandal has highlighted chaos and corruption in Afghanistan's financial system at a time when US-led combat troops are looking to exit the country, a decade after ousting the fundamentalist Taliban regime.
             
The International Monetary Fund wants the Karzai government to wind down Kabul Bank before it releases a new assistance programme, on which hinges billions of dollars in international aid money.
             
"We take note of Governor Fitrat's decision to step down as central bank governor," IMF spokesman Raphael Anspach said, according to the Wall Street Journal.
             
"We look forward to continue discussing with his successor ways to improve the Afghan banking system in the period ahead."
             
Fitrat is reportedly holed up in a hotel in Washington's Virginia suburbs and refusing to return to Afghanistan.
             
"We do know that he is in Washington," US State Department spokeswoman Victoria Nuland told reporters, declining to confirm that he had resigned.
             
"If there were to be a change of leadership at the Afghan central bank, we would continue to encourage that government to take all the necessary steps to reform and strengthen the financial sector," she said.
             
The crisis was triggered last September and led to fears that Kabul Bank could collapse. Some 80 percent of government employees are thought to receive their wages through the bank, Afghanistan's biggest commercial lender.
             
A run on the bank was only halted after government assurances and injections of huge amounts of public money.
             
Fitrat said in April that only around $47 million in cash of the $900 million had been recouped so far.
             
President Karzai has said rogue shareholders have been expelled from the bank and that they will face legal action if they do not repay their loans.
             
But Karzai has also lashed out at international institutions for allegedly failing to unearth Kabul Bank's problems, and his government has hinted that it could pull out of talks with the IMF despite the likely financial damage.
             
A week ago, Finance Minister Omar Zakhilwal said the government was "running out of patience" and accused the IMF of "playing games" over the crisis at Kabul Bank.
             
However, in announcing his resignation, Fitrat accused Afghan authorities of dragging their feet on the promised legal action.
             
According to the BBC, Fitrat said he had expected the probe would "help bring a closure" to the Kabul Bank scandal, but instead it had "brought more danger and it brought more conspiracy against me and against my life".

 

Date created : 2011-06-27

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